Top JP Morgan Banker Quits After Market Abuse Fine

One of London's most prominent
bankers was fined 450,000 pounds ($720,000) for passing on
inside information in a case that will embarrass his employer
J.P. Morgan Cazenove and which marks a push by British
regulators to target high-profile figures.

Top "rainmaker" Ian Hannam resigned on Tuesday, to fight the
fine imposed by the Financial Services Authority (FSA) in
relation to 2008 emails that contained information about one of
his clients, Heritage Oil.

The gruff former special forces soldier, who rose from
humble beginnings, is the fifth person to be fined in relation
to improper disclosure this year by the regulator, which has
previously been accused of being ineffectual in its fight
against financial crime. Of the five, Hannam is the most
prominent.

Hannam resigned from his position as JPMorgan's Global
Chairman of Equity Capital Markets, after two decades at the
firm, JPMorgan informed staff in an internal memo, which
became the talk of the London financial world.

Hannam, a veteran banker in his fifties with a focus on
resources and mining and whose current deals include advising
miner Xstrata on its merger with Glencore, said
he had fully cooperated with the FSA and would appeal against
the decision.

"I will complete my current client commitments and ensure a
smooth handover of responsibilities," Hannam said in an emailed
statement. "Appealing the case while still at the firm would be
an unfair distraction to my clients and colleagues."

The case is a fresh blow for the reputation of investment
banking, as Hannam joins the list of big names targeted by the
regulator, which has been attempting to clamp down on abuse.

Hannam's fine, detailed in a decision notice dated February
27 and the outcome of a lengthy investigation, is among the
largest levied against an individual for market abuse, though it
is dwarfed by the 3.6 million pounds hedge fund investor David
Einhorn incurred in January over trading abuses.

The FSA said there was no evidence that anyone had traded
shares as a result of the emails, or that Hannam made any
personal gain, prompting some to question the prominence given
to the decision by the FSA, before an appeal.

AFGHANISTAN TO MEXICO

South London-born Hannam, a brusque character who is known
to be tough with staff but dedicated to clients, has risen to
become one of the biggest names in the industry, playing a key
role in the tie-up between blue-blood adviser Cazenove and U.S.
rival JPMorgan, as well as a top name in mining.

Hannam's appetite for risk and his belief in frontier
capitalism - most famously in Afghanistan, where he supported a
nascent mining industry - have made him instrumental in shaking
up the once very British bluechip FTSE 100 index, bringing in,
over the last decade, Kazakh miner Kazakhmys, Mexico's
Fresnillo, India's Vedanta and others.

Hannam helped bring Xstrata to market a decade ago and has
since continued to advise its chief executive, Mick Davis, who
came to Hannam's defence on Tuesday. Davis said Hannam was a
trusted adviser and had his full support in the appeal.

"He has always acted with honesty and integrity and I have
greatly valued his counsel," Davis said. "Ian is a great credit
to his profession."

He made deals in Africa, South America and the Middle East.
Fortune magazine once quoted him as saying during a visit to
Baghdad: "I'm here to make five new Iraqi billionaires every
year for the next five years."

Hannam, the son of a local government worker, began his
career with construction company Taylor Woodrow, and switched to
banking with Salomon Brothers in New York in the early 1980s
before moving to Robert Fleming in 1992.

The FSA said in its statement that Hannam had disclosed
inside information on Heritage, which had mandated JP Morgan in
2007 to secure a "substantial" corporate transaction, in two
emails sent in September and October 2008.

One email contained information about a potential offer for
Heritage, where Hannam worked closely with chief executive and
former mercenary Tony Buckingham, while another mentioned a new
oil find - both potentially market moving.

"I believe that the offer will come in in the current
difficult market conditions at 3.50-4.00 pounds per share,"
Hannam told a contact referred to by the FSA as Mr A in the
September email, disclosing takeover talks.

The FSA says Hannam knew Mr A worked with an organisation
potentially interested in investing in Kurdistan, where Heritage
was working.

"I am not trying to force your hand, just wanted to make you
aware of what is happening," he told Mr A in the email.

In a separate email, Hannam told Mr A and a separate
businessman with interests in Kurdistan, named as Mr B, that
"Tony has just found oil and it is looking good".

In his defence to the FSA, Hannam has said the September
email was too general to constitute inside information, while
the information had already been passed to Mr A by Buckingham.

Hannam has appealed to the Upper Tribunal, which may uphold,
change or cancel the FSA's decision.